Rocky road for public transit

Triangle lawmakers divided on bill that could raise sales tax

Mass transit in the Triangle faces a major test in the General Assembly in the coming weeks as advocates push for enactment of a bill authorizing a local half-cent sales tax dedicated to bus and rail service.

The House Transportation Committee is expected to approve the measure this week. After that, however, the road gets rougher. Key leaders of the House Finance Committee think the sales tax, which impacts low-income people the most, is overused in North Carolina. And sponsors concede that passing any new tax will be a hard sell in the legislature as long as the economy is in trouble. (Where do Triangle legislators stand on the transit tax?)

On the upside, the bill—House Bill 148 (PDF, 63 KB) and Senate Bill 151 (PDF, 63 KB) are identical—is dramatically different from an earlier version that went nowhere in last year's legislative session. That bill was narrowly aimed at delivering transit in the Triangle and the Triad counties; it failed when too many legislators in those counties didn't support it and other legislators didn't care. This year's version, by contrast, aims for statewide legislative support by authorizing a quarter-cent sales tax for transit in 94 other counties in addition to the half-cent tax authorization for the Triangle and Triad. (Mecklenburg County, which has had the half-cent sales tax for a decade, is not included in the bill.)

Passage of the bill would merely allow the counties, through their boards of commissioners, to propose a transit tax to their voters. No county could enact one without voter approval.

Rep. Deborah Ross, D-Wake, one of the bill's chief sponsors, says the statewide approach "has created far more support for this bill than we ever expected" among rural legislators. Their counties, too, need better bus service to help people get to their jobs, she says.

The bill also creates a new state transit fund—initially, though, with no state money in it—that could be used to match local transit revenues. The fund could also be used to support short-rail freight line improvements in rural counties and to ports on the coast.

Commuter rail service from rural to urban counties would be eligible for state funding without a local match. For example, the proposed Clayton-to-Raleigh commuter service, which would use the N.C. Railroad Company's freight corridor—but on parallel tracks—could be funded.

Rural legislators' votes give the bill a fair chance of success in the House, Ross predicts, whereas the Triangle delegation's support for it is spotty. Even so, she adds, "It's still going to be a hard bill."

The biggest question mark hanging over the bill is the regressive nature of the sales tax, a major stumbling block for progressive legislators like Reps. Paul Luebke, D-Durham, and Jennifer Weiss, D-Wake. They hold chairmanships of the powerful House Finance Committee and will have a major say in how the issue is resolved.

Luebke told the Indy this week that he's undecided. However, he has made it clear to colleagues, as has Weiss, that he would prefer a bill that's less reliant on sales tax revenues and funds transit in part from property taxes on transit-related development projects.

Rep. Larry Hall, D-Durham, expressed similar reservations. "I do have concerns about what the funding mix is going to be," Hall said, "and also about assuring access for [low-income] people who need transit the most."

Ross is trying to counter those objections. Although sales taxes are regressive, she concedes, since low-income people spend a much higher percentage of their earnings on taxable items, the impact is offset by the benefits of efficient transit for low-income communities. In addition, food purchases would be exempt from the additional sales tax.

Ross agrees that, in the future, sales tax revenues could be supplemented by measures like tax-increment financing—levies on the higher value of properties as they develop around transit stops—that the General Assembly has already authorized local governments to use.

A second question mark is whether the state should require county governments, if they apply for matching grants, to include affordable housing in developments around the station stops. Language added to the bill by Sen. Josh Stein, D-Wake, could have that effect. It would require the N.C. Department of Transportation to consider, before making a grant, whether the county and municipal governments have policies to make at least 30 percent of all housing units near the station affordable to families with incomes below 60 percent of the county's median level.

Some housing advocates think that provision should be stronger. Transit supporters say privately that stronger language could turn the pro-development groups, most of which support the bill, against it.

In the Triangle, a third question is how the money from three separate county tax measures—in Wake, Durham and Orange counties—would be allocated and spent.

The bill now calls for each county to develop its own transit plan and to execute it alone if other Triangle counties don't approve the tax. Wake County officials, for example, held a forum last week to discuss a draft plan calling for the purchase, with its half-cent sales tax revenues, of 100 new buses over the next decade; in addition, Wake could afford to build a 17-mile rail segment from northwest Cary to downtown Raleigh and points in north Raleigh.

But Ross and David King, general manager of Triangle Transit, the regional agency, made it clear that the three county plans should mesh into a strong regional system. Ideally, they would eventually unite the various bus lines and, by 2025, create a seamless 56-mile rail transit line from Raleigh to Durham to Chapel Hill.

"We all know the bill is written to allow individual counties to proceed on their own," says Chapel Hill Councilman Bill Strom, chair of the Triangle Transit Authority's board. "But the intent is to have a regional system, and people are working very hard behind the scenes to make that happen.

"This clearly is a situation," Strom adds, "where 1-plus-1-plus-1 [counties] equals 5 or 6 for the region as a whole."

None of Durham County's three other Democratic House members have signed on, nor have Wake County's four Republican House members.

Identical to the House version, Senate Bill 151 (PDF, 63 KB) has broader and bipartisan support among Triangle legislators.

SB 151 has six local co-sponsors: Democratic Sens. Floyd McKissick of Durham County, Ellie Kinnaird of Orange County and Bob Atwater of Chatham County (whose district includes part of Durham County). In Wake, Democratic Sens. Josh Stein and Vernon Malone have signed on, as has Republican Sen. Richard Stevens, the chief Senate sponsor.

Only Republican Sen. Neal Hunt of Wake County is absent from the Triangle's list.